Exhibit 10.3
THE BEARD COMPANY
2005 STOCK OPTION PLAN
Adopted: June 9, 2005
THE BEARD COMPANY
2005 STOCK OPTION PLAN
Table of Contents
Page
ARTICLE I General Provisions.................................................1
1.1 Purpose.........................................................1
1.2 General.........................................................1
1.3 Administration of the Plan......................................1
1.4 Shares Subject to the Plan......................................1
1.5 Participation in the Plan.......................................2
1.6 Determination of Fair Market Value..............................2
1.7 Grants of Options Under Stock Option Agreement..................2
1.8 Amendment and Termination of the Plan...........................2
1.9 Effective Date..................................................2
1.10 Securities Law Requirements.....................................2
1.11 Separate Certificates...........................................3
1.12 Payment for Stock...............................................3
1.13 Stock Options and ISO Options Granted Separately................3
1.14 Use of Proceeds.................................................3
1.15 Non-Transferability of Options..................................3
1.16 Additional Documents on Death of Participant....................4
1.17 Changes in Employment...........................................4
1.18 Shareholder Rights..............................................4
1.19 Adjustments Upon Changes in Capitalization......................4
1.20 Payment of Withholding Taxes....................................4
1.21 Assumption of Outstanding Options...............................5
1.22 Retirement and Disability.......................................5
ARTICLE II Stock Options.....................................................5
2.1 General Terms...................................................5
2.2 Grant and Terms for Stock Options...............................5
(a) Option Price.....................................................5
(b) Acceleration of Otherwise Unexercisable Stock Options on
Retirement, Death, Disability or Other Special Circumstances..6
(c) Number of Stock Options Granted...............................6
(d) Notice to Exercise Stock Option...............................6
ARTICLE III ISO Options......................................................6
3.1 General Terms...................................................6
3.2 Grant and Terms of ISO Options..................................6
(a) ISO Option Price..............................................7
(b) Annual ISO Option Limitation..................................7
(c) Terms of ISO Options..........................................7
(d) Acceleration of Otherwise Unexercisable ISO Options on
Retirement, Death, Disability or Other Special Circumstances..7
(e) Number of ISO Options Granted.................................8
(f) Notice to Exercise ISO Option.................................8
ARTICLE IV Acceleration of Options on Change of Control......................8
4.1 Acceleration of Options on Change of Control....................8
ARTICLE V Options Not Qualifying as Incentive Stock Options..................9
THE BEARD COMPANY
2005 STOCK OPTION PLAN
ARTICLE I
General Provisions
1.1 Purpose. The purpose of THE BEARD COMPANY 2005 STOCK OPTION PLAN (the
"Plan") shall be to attract, retain and motivate key management, directors or
key professional employees (the "Participants") of The Beard Company (the
"Company") and subsidiaries by way of granting (i) nonqualified stock options
("Stock Options") and (ii) incentive stock options ("ISO Options"). For purposes
of this Plan, Stock Options and ISO Options are sometimes collectively herein
called "Options." The ISO Options to be granted under the Plan are intended to
be qualified pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"); and, the Stock Options to be granted are intended to be
"nonqualified stock options" as described in Sections 83 and 421 of the Code.
Further, under the Plan, the terms "parent" and "subsidiary" shall have the same
meaning as set forth in Subsections (e), (f) and (g) of Section 424 of the Code
unless the context herein clearly indicates to the contrary.
1.2 General. The terms and provisions of this Article I shall be applicable
to Stock Options and ISO Options unless the context herein clearly indicates to
the contrary.
1.3 Administration of the Plan. The Plan shall be administered by the
Compensation and Stock Option Committee ("Committee") appointed by the Board of
Directors ("Board") of the Company and consisting of not less than two members
from the Board who are not officers or employees of the Company or any
subsidiary. The members of the Committee shall serve at the pleasure of the
Board and such members shall be ineligible to participate under the Plan during
their service as members of the Committee. Committee membership shall be limited
to only those members of the Board who have not, during the year preceding their
appointment, been granted or awarded any "equity securities" (as such term is
defined in Rule 16a-l(d) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (or any successor rule) pursuant to the Plan or
any other plan of the Company or any of its affiliates. The Committee shall have
the power where consistent with the general purpose and intent of the Plan to
(i) modify the requirements of the Plan to conform with the law or to meet
special circumstances not anticipated or covered in the Plan, (ii) suspend or
discontinue the Plan, (iii) establish policies and (iv) adopt rules and
regulations and prescribe forms for carrying out the purposes and provisions of
the Plan including the form of any "stock option agreements" ("Stock Option
Agreements"). Unless otherwise provided in the Plan, the Committee shall have
the authority to interpret and construe the Plan, and determine all questions
arising under the Plan and any agreement made pursuant to the Plan. Any
interpretation, decision or determination made by the Committee shall be final,
binding and conclusive. A majority of the Committee shall constitute a quorum,
and an act of the majority of the members present at any meeting at which a
quorum is present shall be the act of the Committee.
1.4 Shares Subject to the Plan. Shares of stock ("Stock") covered by Stock
Options and ISO Options shall consist of One Hundred Thousand (100,000) shares
of the voting common stock, par value $.0006665, of the Company. Either
authorized and unissued shares or treasury shares may be delivered pursuant to
the Plan. If any Option for shares of Stock granted to a Participant lapses, or
is otherwise terminated, the Committee may grant Stock Options or ISO Options
for such shares of Stock to other Participants.
1.5 Participation in the Plan. The Committee shall determine from time to
time those Participants who are to be granted Stock Options and ISO Options and
the number of shares of Stock covered thereby. Provided, however, those
directors who are not key management employees of the Company, its parent or
subsidiaries of the Company shall only be eligible to be granted Stock Options
under this Plan.
1.6 Determination of Fair Market Value. As used in the Plan, "fair market
value" shall mean the last sale price of the common stock of the Company as
reported by the OTC Bulletin Board (i) on the date of the grant or (ii) if there
have been no sales of such securities on the granting date, the most recent sale
reported as of the granting date, exercise date, or other relevant date.
1.7 Grants of Options Under Stock Option Agreement. Each Stock Option or
ISO Option granted under this Plan shall be evidenced by the minutes of a
meeting of the Committee or by the written consent of the Committee and by a
written Stock Option Agreement effective on the date of grant and executed by
the Company and the Participant. Each Option granted hereunder shall contain
such terms, restrictions and conditions as the Committee may determine, which
terms, restrictions and conditions mayor may not be the same in each case.
1.8 Amendment and Termination of the Plan. The Plan shall terminate at
midnight, February 2, 2015, but prior thereto may be altered, changed, modified,
amended or terminated by written amendment approved by the Board. Provided, that
no action of the Board may, without the approval of the holders of a majority of
the securities of the Company entitled to vote thereon, increase the aggregate
number of shares of Stock which may be purchased under ISO Options granted under
the Plan; amend or alter the ISO Price; materially increase the benefit accruing
to Participants under the Plan, materially modify the requirements as to
eligibility for participation in the Plan; or amend the Plan in any manner which
would impair the applicability of Rule 16b-3 as promulgated under the Exchange
Act (or any successor rule) to the Plan. Except as provided in this Article I,
no amendment, modification or termination of the Plan shall in any manner
adversely affect any Stock Option or ISO Option theretofore granted under the
Plan without the consent of the affected Participant.
1.9 Effective Date. The Plan has been unanimously approved by the board of
directors of the Company on February 3, 2005, and is therefore effective as of
such date.
1.10 Securities Law Requirements. The Company shall have no obligation to
issue any Stock hereunder unless such shares are listed on the applicable stock
exchange(s), if any, on which the Company's shares of Stock are listed at the
time and the issuance of such shares would comply with any applicable federal or
state securities laws or any other applicable law or regulations thereunder.
1.11 Separate Certificates. Separate certificates representing the common
stock of the Company to be delivered to a Participant upon the exercise of any
Stock Options or ISO Options will be issued to such Participant.
1.12 Payment for Stock. Payment for shares of Stock purchased under this
Plan shall be made in full and in cash or by check, Stock of the Company or a
combination thereof, at the time of exercise of the Options as a condition
thereof, and no loan or advance shall be made by the Company for the purpose of
financing, in whole or in part, the purchase of Stock. In the event that common
stock of the Company is utilized as consideration for the purchase of Stock upon
the exercise of a Stock Option or an ISO Option, then, such common stock shall
be valued at the "fair market value" as defined in Section 1.6 of the Plan. In
addition to the foregoing procedure which may be available for the exercise of
any Stock Option or ISO Option, the Participant may deliver to the Company a
notice of exercise including an irrevocable instruction to the Company to
deliver the stock certificate issued in the name of the Participant representing
the shares subject to an Option to a broker authorized to trade in the common
stock of the Company. Upon receipt of such notice, the Company will acknowledge
receipt of the executed notice of exercise and forward this notice to the
broker. Upon receipt of the copy of the notice which has been acknowledged by
the Company, and without waiting for issuance of the actual stock certificate
with respect to the exercise of the Option, the broker may sell the Stock or any
portion thereof. Upon receipt of the notice to exercise from the Company, the
broker will deliver directly to the Company that portion of the sales proceeds
to cover the Option Price and any withholding taxes, if any. Further, the broker
may also facilitate a loan to the Participant upon receipt of the notice of
exercise in advance of the issuance of the actual stock certificate as an
alternative means of financing and facilitating the exercise of any Option. For
all purposes of effecting the exercise of an Option, the date on which the
Participant gives the notice of exercise to the Company will be the date he
becomes bound contractually to take and pay for the shares of Stock underlying
the Option. The Committee may also adopt such other procedures which it desires
for the payment of the purchase price upon the exercise of a Stock Option or ISO
Option which are not inconsistent with the applicable provisions of the Code
which relate to Stock Options and ISO Options.
1.13 Stock Options and ISO Options Granted Separately. Since the Committee
is authorized to grant Stock Options and ISO Options to Participants, the grants
thereof and Stock Option Agreements relating thereto will be made separately and
totally independent of each other. Except as it relates to the total number of
shares of Stock which may be issued under the Plan, the grant or exercise of a
Stock Option shall in no manner affect the grant and exercise of any ISO
Options. Similarly, the grant and exercise of an ISO Option shall in no manner
affect the grant and exercise of any Stock Options.
1.14 Use of Proceeds. The proceeds received by the Company from the sale of
Stock pursuant to the exercise of Options granted under the Plan shall be added
to the Company's general funds and used for general corporate purposes.
1.15 Non-Transferability of Options. Except as otherwise herein provided,
any Option granted shall not be transferable otherwise than by will or the laws
of descent and distribution, and the Option may be exercised, during the
lifetime of the Participant, only by him. More particularly (but without
limiting the generality of the foregoing), the Option shall not be assigned,
transferred (except as provided above), pledged or hypothecated in any way
whatsoever, shall not be assignable by operation of law and shall not be subject
to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation, or other disposition of the Option contrary to
the provisions hereof shall be null and void and without effect.
1.16 Additional Documents on Death of Participant. No transfer of an Option
by the Participant by will or the laws of descent and distribution shall be
effective to bind the Company unless the Company shall have been furnished with
written notice and an authenticated copy of the will and/or such other evidence
as the Committee may deem necessary to establish the validity of the transfer
and the acceptance by the successor to the Option of the terms and conditions of
such Option.
1.17 Changes in Employment. So long as the Participant shall continue to be
an employee of the Company or its parent or one of its subsidiaries, any Option
granted to him shall not be affected by any change of duties or position.
Nothing in the Plan or in any Stock Option Agreement which relates to the Plan
shall confer upon any Participant any right to continue in the employ of the
Company or its parent or any of its subsidiaries, or interfere in any way with
the right of the Company or its parent or any of its subsidiaries to terminate
his employment at any time.
1.18 Shareholder Rights. No Participant shall have a right as a shareholder
with respect to any shares of Stock subject to an Option prior to the purchase
of such shares of Stock by exercise of the Option.
1.19 Adjustments Upon Changes in Capitalization. The aggregate number of
shares of Stock under Stock Options and ISO Options granted under the Plan, the
Option Price and the ISO Price and the total number of shares of Stock which may
be purchased by a Participant on exercise of a Stock Option and an ISO Option
shall be appropriately adjusted or modified by the Committee to reflect any
recapitalization, stock split, merger, consolidation, reorganization,
combination, liquidation, stock dividend or similar transaction involving the
Company. Provided, any such adjustment shall be made in such a manner as to not
constitute a modification as defined in Section 424(h) of the Code.
1.20 Payment of Withholding Taxes. Except as provided in Section 1.12
herein, no exercise of any Option shall be permitted, nor shall any Stock be
issued to any Participant until the Company receives full payment for the Stock
purchased which shall include any required state and federal withholding taxes.
Further, upon the exercise of any Stock Option, the Participant may direct the
Company to retain from the shares of Stock to be issued upon exercise of the
Stock Option that number of initial shares of Stock (based on fair market value)
that would be necessary to satisfy the requirements for withholding any amounts
of taxes due upon the exercise of such Stock Option. In the event that the
Participant disposes of any Stock acquired by the exercise of an ISO Option
within the two-year period following grant, or within the one-year period
following exercise, of the ISO Option, the Company shall have the right to
require the Participant to remit to the Company an amount sufficient to satisfy
all federal, state and local withholding tax requirements.
1.21 Assumption of Outstanding Options. To the extent permitted by the then
applicable provisions of the Code, any successor to the Company succeeding to,
or assigned the business of, the Company as the result of or in connection with
a corporate merger, consolidation, combination, reorganization, liquidation or
other corporate transaction shall assume Options outstanding under the Plan or
issue new Options in place of outstanding Options under the Plan with such
assumption to be made on a fair and equivalent basis in accordance with the
applicable provisions of Section 424(a) of the Code; provided, in no event will
such assumption result in a modification of any Option as defined in Section
424(h) of the Code.
1.22 Retirement and Disability. For the purpose of this Plan, "Retirement"
shall mean the voluntary termination of employment of a Participant with the
Company, its parent or any of its subsidiaries after attaining at least 55 years
of age; and, "Disability" shall mean termination of employment of a Participant
after incurring a "disability" as defined in Section 22(e)(3) of the Code.
ARTICLE II
Stock Options
2.1 General Terms. With respect to Stock Options granted on or after the
effective date of the Plan, the following provisions of this Article II shall
apply. The Stock Options granted under this Article II are intended to be
"nonqualified stock options" as described in Sections 83 and 421 of the Code.
2.2 Grant and Terms for Stock Options. Stock Options shall be granted on
the following terms and conditions. Stock Options shall only be granted to key
management employees, directors or key professional employees of the Company,
its parent or any subsidiary of the Company. No Stock Option shall be
exercisable more than ten (10) years from the date of grant. Subject to such
limitations, the Committee shall have the discretion to fix the period ("Option
Period") during which Stock Options may be exercised. At all times during the
period commencing with the date a Stock Option is granted to a Participant and
ending on the earlier of the expiration of the Option Period applicable to such
Stock Option or the date which is three (3) months prior to the date the Stock
Option is exercised by such Participant, such Participant must be an employee or
a director of either (i) the Company, (ii) a parent or a subsidiary corporation
of the Company, or (iii) a corporation or parent or a subsidiary corporation of
such corporation issuing or assuming a Stock Option in a transaction to which
Section 424(a) of the Code applies. Provided, in the case of a Participant who
has incurred a Disability, the aforesaid three (3) month period shall mean a one
(1) year period. Provided further, in the event a Participant's employment or
director's position is terminated by reason of his death, his personal
representative may exercise any unexercised Stock Option granted to the
Participant under the Plan at any time within one (1) year after the
Participant's death but in any event not after the expiration of the Option
Period applicable to such Stock Option.
(a) Option Price. The option price ("Option Price") for shares of
Stock subject to any Stock Option shall be determined by the Committee, but in
no event shall such Option Price be less than 75% of the "fair market value" of
the Stock on the date of grant. Provided further, in no event shall the Option
Price be less than the par value of the Stock.
(b) Acceleration of Otherwise Unexercisable Stock Options on
Retirement, Death, Disability or Other Special Circumstances. The Committee, in
its sole discretion, may permit (i) a Participant who terminates employment due
to Retirement, (ii) a Participant who terminates employment due to a Disability,
(iii) the personal representative of a deceased Participant, or (iv) any other
Participant who terminates employment or his director's position upon the
occurrence of special circumstances (as determined by the Committee) to purchase
(within three (3) months of such date of termination of employment or one (1)
year in the case of a deceased Participant or a Participant suffering a
Disability) all or any part of the shares subject to any Stock Option on the
date of the Participant's Retirement, Disability, death, or as the Committee
otherwise so determines, notwithstanding that all installments, if any, with
respect to such Stock Option, had not yet accrued on such date.
(c) Number of Stock Options Granted. Participants may be granted more
than one Stock Option. In making any such determination, the Committee shall
obtain the advice and recommendation of the officers of the Company, its parent,
or a subsidiary of the Company which have supervisory authority over such
Participants. The granting of a Stock Option under the Plan shall not affect any
outstanding Stock Option previously granted to a Participant under the Plan (or
any other plans of the Company).
(d) Notice to Exercise Stock Option. Upon exercise of a Stock Option,
a Participant shall give written notice to the Secretary or Personnel Manager of
the Company, or other officer designated by the Committee, at the Company's
principal office. No Stock shall be issued to any Participant until the Company
receives full payment for the Stock purchased under the Stock Option, including
any required state and federal withholding taxes; provided, however, nothing
herein shall be construed as requiring payment of withholding taxes at the time
of exercise if payment of taxes is deferred pursuant to any provision of the
Code, and actions are taken which are designed to reasonably insure payment of
withholding taxes when due.
ARTICLE III
ISO Options
3.1 General Terms. With respect to ISO Options granted on or after the
effective date of the Plan the following provisions in this Article III shall
apply to the exclusion of any inconsistent provision in any other Article in
this Plan since the ISO Options to be granted under the Plan are intended to
qualify as "incentive stock options" as defined in Section 422 of the Code.
3.2 Grant and Terms of ISO Options. ISO Options may be granted only to key
management or key professional employees of the Company, its parent or any
subsidiary of the Company. No ISO Options shall be granted to any person who is
not eligible to receive "incentive stock options" as provided in Section 422 of
the Code. No ISO Options shall be granted to any key management or key
professional employee if, immediately before the grant of an ISO Option, such
employee owns more than 10% of the total combined voting power of all classes of
stock of the Company, its parent or its subsidiaries (as determined in
accordance with the stock attribution rules contained in Section 422 and Section
424( d) of the Code). Provided, the preceding sentence shall not apply if, at
the time the ISO Option is granted, the ISO Price (as defined below) is at least
110% of the "fair market value" of the Stock subject to the ISO Option, and such
ISO Option by its terms is exercisable no more than five (5) years from the date
such ISO Option is granted.
(a) ISO Option Price. The option price for shares of Stock subject to
an ISO Option ("ISO Price") shall be determined by the Committee, but in no
event shall such ISO Price be less than the greater of (a) the "fair market
value" of the Stock on the date of grant or (b) the par value of the Stock.
(b) Annual ISO Option Limitation. With respect to ISO Options granted,
in no event during any calendar year will the aggregate "fair market value"
(determined as of the time the ISO Option is granted) of the Stock for which the
Participant may first have the right to exercise under an ISO Option granted
under all "incentive stock option" plans qualified under Section 422 of the Code
which are sponsored by the Company, its parent and its subsidiary corporations
exceed $100,000. For purposes of this Section 3.2(b), "incentive stock options,"
as defined under Section 422 (and its predecessor Section 422A) of the Code,
granted prior to January 1, 1987, shall be disregarded when calculating the
foregoing $100,000 limitation.
(c) Terms of ISO Options. ISO Options shall be granted on the
following terms and conditions: No ISO Option shall be exercisable more than ten
(10) years from the date of grant. Subject to such limitations, the Committee
shall have the discretion to fix the period (the "ISO Period") during which any
ISO Option may be exercised. ISO Options granted shall not be transferable
except by wi1l or by laws of descent and distribution. At all times during the
period commencing with the date an ISO Option is granted to a Participant and
ending on the earlier of the expiration of the ISO Period applicable to such ISO
Options or the date which is three (3) months prior to the date the ISO Option
is exercised by such Participant, such Participant must be an employee of either
(i) the Company, (ii) a parent or a subsidiary corporation of the Company, or
(iii) a corporation or a parent or a subsidiary corporation of such corporation
issuing or assuming an ISO Option in a transaction to which Section 424(a) of
the Code applies. Provided, in the case of a Participant who incurs a
Disability, the aforesaid three (3) month period shall mean a one (1) year
period. Provided further, in the event a Participant's employment is terminated
by reason of his death, his personal representative may exercise any unexercised
ISO Option granted to the Participant under the Plan at any time within one (1)
year after the Participant's death but in any event not after the expiration of
the ISO Period applicable to such ISO Option.
(d) Acceleration of Otherwise Unexercisable ISO Options on Retirement,
Death, Disability or Other Special Circumstances. The Committee, in its sole
discretion, may permit (i) a Participant who terminates employment due to
Retirement, (ii) a Participant who terminates employment due to a Disability,
(iii) the personal representative of a deceased Participant, or (iv) any other
Participant who terminates employment upon the occurrence of special
circumstances (as determined by the Committee) to purchase (within three (3)
months of such date of termination of employment or one (1) year in the case of
a deceased Participant or a Participant suffering a Disability) all or any part
of the shares subject to any ISO Option on the date of the Participant's
Retirement, Disability, death, or as the Committee otherwise so determines,
notwithstanding that all installments, if any, had not accrued on such date.
(e) Number of ISO Options Granted. Subject to the applicable
limitations contained in the Plan with respect to ISO Options, Participants may
be granted more than one ISO Option. In making any such determination, the
Committee shall obtain the advice and recommendation of the officers of the
Company, its parent or a subsidiary of the Company which have supervisory
authority over such Participants. Further, the granting of an ISO Option under
the Plan shall not affect any outstanding ISO Option previously granted to a
Participant under the Plan.
(f) Notice to Exercise ISO Option. Upon exercise of an ISO Option, a
Participant shall give written notice to the Secretary of the Company, or other
officer designated .by the Committee, at the Company's main office in Oklahoma
City, Oklahoma. No Stock shall be issued to any Participant until the Company
receives full payment for Stock purchased under the ISO Option.
ARTICLE IV
Acceleration of Options on Change of Control
4.1 Acceleration of Options on Change of Control. In the event that a
Change of Control (as defined herein) has occurred with respect to the Company,
any and all ISO Options and Stock Options become automatically fully vested and
immediately exercisable with such acceleration to occur without the requirement
of any further act by either the Company or the Participant. For the purposes of
this Section 4.1, the term "Change of Control" shall mean:
(i) The acquisition in a transaction or a series of transactions by
any person, entity or "group," within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), of
beneficial ownership, of 30% or more of either the then outstanding shares of
common stock or the combined voting power of the Company's then outstanding
voting securities; provided, however, that any acquisition of beneficial
ownership of common stock or voting securities of the Company which is less than
30% of either the then outstanding shares of common stock or the combined voting
power of the Company's then outstanding voting securities shall be deemed to be
a "change of control" for the purposes of this Agreement if a majority of the
Incumbent Board determines that such acquisition has caused a change of control
to occur;
(ii) Individuals who, as of the date hereof, constitute the Board of
Directors of the Company (as of the date hereof the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors comprising the Incumbent Board (other than
an election or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
(iii) Approval by the stockholders of the Company of (A) a
reorganization, merger or consolidation, in each case with respect to which the
stockholders of the Company will not, immediately after consummation thereof,
own more than 50% of the combined voting power of the then outstanding voting
securities of either (a) the consolidated company or the surviving company in
the reorganization or merger, or (b) any company which prior to the
consolidation, reorganization or merger owned 50% or more of the combined voting
power of its then outstanding voting securities; provided, however, no Change of
Control shall be deemed to have occurred if members of the Incumbent Board will,
immediately thereafter, constitute at least a majority of the board of directors
of the consolidated or surviving company, or any company which owns, directly or
indirectly, at least a majority of the voting power of the consolidated or
surviving company's outstanding voting securities, and the Incumbent Board has
determined, prior to such shareholder approval, that a Change of Control shall
not be deemed to result from such transaction; or (B) a liquidation or
dissolution of the Company or the sale of all or substantially all of the assets
of the Company.
ARTICLE V
Options Not Qualifying as Incentive Stock Options
With respect to all or any portion of any Option granted under the Plan not
qualifying as an "incentive stock option" under Section 422 of the Code, such
Option shall be considered as a Stock Option granted under this Plan for all
purposes. Further, this Plan and any ISO Options granted hereunder shall be
deemed to have incorporated by reference all the provisions and requirements of
Section 422 of the Code (and the Treasury Regulations issued thereunder) which
are required to provide that all ISO Options granted hereunder shall be
"incentive stock options" described in Section 422 of the Code.